Summary
Foreign transactions summary
- Course
- Institution
- Book
This is an overview of IAS 21 and states the basic principles that need to be applied because of this standard.
[Show more]
Connected book
Book Title:
Author(s):
- Edition:
- ISBN:
- Edition:
More summaries for
-
Deferred tax summary
Seller
Followdutoitmaryn
Reviews received
Content preview
General aspectsGeneral approach:
1. Account for transaction using normal principles No Deferred tax on forex differences = tax & accounting aligned
2. Identify correct translation rate
3. Translate amount for journal entry
4. Year end = maybe adjust balances?
Translation rates
Initial recognition Settlement date
Transaction at point in time: Translate to spot exchange rate
$ x spot exchange rate on date Recognise exchange difference in P/L
Transaction over period of time:
$ x average exchange rate during Exchange difference = what the items rate is currently in our books
period vs what the rate should be translated to
If there is a year end between
these dates
Inventory:
Different treatments for: Monetary = fixed amount NRV @ R on value date
Monetary items = translate to closing rate of cash vs
Exch. diff in P/L Cost @ R on acquisition
Non-moneraty items @ cost = not translate
Non-monetary @ FV = translate to rate on date of FV measurement
Exch. diff in P/L or OCI
(where FV adj is)
Forward exchange contracts
Entered into FEC Reporting date/Year end Settlement date
No accounting entry Agreed rate vs new FEC rate with same maturity date Exch. diff as
Movement = P/L mentioned above
TIP: use timelines for this standard and if needed tables with rates used/to be used beneath timeline
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller dutoitmaryn. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $0.00. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
79650 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now